Disrupting the Nonprofit Space

The civic hackathon in Denver this weekend is a great example of platform building: creating a space that enables others to directly tackle a community challenge.

One of the more exciting developments in the nonprofit space is the proliferation of non-nonprofit models for advancing a social sector mission. Some of those models are basically variations on private sector organizational models with a social mission twist. LC3s, or low-profit limited liability corporations, are one example. The B Corporation model, which requires a firm to have an explicit social or environmental mission and to consider broader social values when making decisions, is another. Some of the models dispense with the twist and instead go with a traditional corporate structure (often as an LLC) but explicitly incorporate a social mission

I’m seeing at least two other types of models, both of which are pretty exciting. Distributed network models rely on individuals that can be activated (or can choose to activate themselves) in ad-hoc fashion whenever the issue and circumstances inspire them to do so. I think the “free agent” idea that Beth Kanter and Alison Fine describe in The Networked Nonprofit is another way to describe this idea.

Another model that I find really interesting is more of a platform model; individuals or groups creating platforms that enable others to launch and execute their own projects. The platform models are often guided but with a light hand. My PlaceMatters colleague Jason Lally orchestrated a civic hackathon in Denver this weekend, bringing together software developers, web and mobile designers, and social advocates to build civic apps for the web and for mobile devices in a weekend-long marathon. He and his collaborators set the ground rules, created the space, and brought all the ingredients together, but the participants themselves decided what apps to actually build (the ideas that attracted the most people and the best talent were the ones most likely to be built). The Greenhouse Project, a Denver-based incubator for international development nonprofits, and RallyPad, an incubator for nonprofits and social ventures in San Francisco, are two more examples.

This is a cool model partly because the platform can take so many different forms: a permanent physical space (like an incubator), a relational platform (providing a network of relationships to tap into), and a convening (like a hackathon) among them.

I think the nonprofit world is in a state of disruption, in some ways like the disruption facing the publishing industry. Unlike the publishing industry, though, I don’t think nonprofits (and their advocates, like state nonprofit associations) quite realize just how deeply vulnerable the traditional model actually is. I suspect it’s inevitable that traditional nonprofits will diminish in significance relative to emerging social sector models, and whether the traditional 501c(3) structure remains viable at all will depend on their willingness to adapt. Either way, it’s going to be great fun watching the new models mature and even newer models surface.

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